Commercial Loans

How Commercial Loans Work

Types of Commercial Loans

Commercial loans are mortgage programs designed to finance commercial and income-producing properties. These loans help business owners, investors, and organizations secure funding for properties such as office buildings, retail centers, industrial facilities, multi-family residences, and other commercial real estate assets.

Commercial loan options and terms can vary significantly based on the type of property, the borrower’s financial profile, and the intended use of the building.

Common types of commercial financing include:
Conventional Commercial Loans
Standard commercial mortgages offered by banks or lenders, often used for stabilized properties with strong income history.
SBA Commercial Loans
Loans backed by the U.S. Small Business Administration, such as SBA 7(a) and CDC/504 programs, that may offer favorable terms for qualified small business owners.
Bridge Loans
Short-term financing designed to bridge the gap between purchase and longer-term financing or property sale.
Construction Loans
Financing for ground-up builds or substantial property redevelopment prior to stabilization.

Program availability and requirements vary widely depending on property type and the borrower’s goals.

Who Commercial Loans May Be Right For

Commercial loans may be considered by:
Business owners seeking to purchase or refinance commercial property
Investors acquiring income-producing real estate
Developers requiring financing for construction or redevelopment
Property owners looking to restructure existing debt or access equity
Eligibility depends on multiple factors, including business financials, income from the property, credit profile, and lender underwriting standards.

When obtaining a commercial loan, lenders evaluate factors such as property cash flow, business financials, credit history, and the type of commercial asset being financed. Unlike typical residential mortgages, commercial underwriting often focuses more on the property’s income potential and business financial strength.

Borrowers provide documentation regarding business revenue, operating expenses, asset value, and cash flow projections. Loan terms, rates, and structures may vary based on program type, property risk, and borrower qualifications.